TikTok Considers Changes to Distance App From Chinese Roots
By Liza Lin and Shan Li
ByteDance Ltd is considering changing the corporate structure of
its popular short-video app TikTok, as it comes under increasing
scrutiny in its biggest markets over its Chinese ties.
Senior executives are discussing options such as creating a new
management board for TikTok or establishing a new headquarters for
the app outside of China to distance the app's operations from
China, said a person familiar with the company's thinking.
TIkTok, which has shot to global fame over the last two years
thanks to its catchy dancing and lip syncing videos, is owned by
Beijing-based ByteDance, one of the world's most valuable
technology startups. ByteDance, whose secondary shares have valued
the firm at $150 billion in recent weeks, counts big-name U.S.
investors such as Coatue Management and Sequoia Capital among its
The app has seen a surge in downloads as the coronavirus kept
millions of people locked up in their homes and eager for
distractions. About 315 million users downloaded TikTok in the
first quarter of the year, the most downloads ever for an app in a
single quarter, according to research firm Sensor Tower, bringing
its total to more than 2.2 billion world-wide.
But as TikTok grows in popularity -- and an increasingly
assertive Chinese government raises hackles in foreign capitals --
regulatory pressure on the app is intensifying.
Officials in several countries have expressed concerns with the
large volumes of user data TikTok collects, with some speculating
that ByteDance could be compelled to share it with the Chinese
government. Tiktok has repeatedly denied receiving Chinese
government requests for user data and said it wouldn't respond if
The U.S. State and Defense departments already prohibit
employees from downloading TikTok on government devices. On
Tuesday, Secretary of State Mike Pompeo hinted at a possible ban
for TikTok and other Chinese apps during an interview with Fox
In Australia, the chair of a legislative committee looking into
foreign interference through social media named TikTok among the
platforms that might be called to appear.
"What's needed is a really clear understanding from the
platforms about their approach to privacy and their approach to
content moderation. That's one of the objectives of this inquiry,"
Jenny McAllister, the chairwoman of the committee, told an
Australian radio station on Monday.
ByteDance's discussions about changing how TikTok is run are
still in their early stages, but setting up an independent TikTok
management board would allow a degree of autonomy from the parent
company, the person familiar with the firm's thinking said. This
person was not aware of any discussions around a corporate
TikTok had also been mulling opening a new global headquarters
as early as December, the Wall Street Journal reported at the time.
Singapore, London, Dublin were considered as possible locations.
Recent events accelerated such plans, the person said.
TikTok currently doesn't have a global headquarters. Recently
installed Chief Executive Officer Kevin Mayer is based in Los
(END) Dow Jones Newswires
July 09, 2020 09:33 ET (13:33 GMT)
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